The Great Simplification with Nate Hagens - Joris van der Schot: "Oil Refining 101 and Other Energy Stories"

Episode Date: October 18, 2023

On this episode, Nate is joined by energy industry professional Joris van der Schot to explain the basics of oil refineries, their limitations, and other cultural narratives about energy. Oil is the lifeblood of our economies, yet most of us know so little about how it actually becomes all the different final products that we use. Just how massive is the scale of our energy consumption? How flexible and resilient are oil refineries to shifting oil demand? Can we keep an open mind to realistic and helpful innovations while also grounding our preparations for the future in practical energy strategy ahead of The Great Simplification? About Joris van der Schot Joris van der Schot is a former Royal Dutch Shell executive with over a decade of international experience in the oil industry, where he held roles as a control systems engineer, corporate strategy advisor, refinery economist and lastly, the company's global aviation gasoline supply manager.After a sabbatical year in Provence, Joris left the oil industry and set out on a quest to accelerate the clean energy transition through breakthrough technology. He currently works at french scale-up Energy Pool, providing storage and other flexibility services that enable the integration of renewable energy on the electricity grid. Watch on YouTube: https://youtu.be/kmzzIWkTLyU More info, and show notes: https://www.thegreatsimplification.com/episode/93-joris-van-der-schot 

You're listening to The Great Simplification with Nate Higgins. That's me. On this show, we try to explore and simplify what's happening with energy, the economy, the environment, in our society. Together with scientists, experts, and leaders, this show is about understanding the bird's eye view of how everything fits together, where we go from here and what we can do about it as a society and as individuals. Today's guest is Dutch energy expert Joris van der Schott, currently living in Switzerland. Joris worked at Royal Dutch Shell for over a decade as a refinery expert, an executive at Shell. Before turning his attention to the clean energy transition, he now works for a French scale-up energy pool, providing flexibility services to the electricity grid with a focus on energy.

energy storage. We today talk about oil refining, this incredibly complex process that is in between the oil from the ground and the gas at the pump. How flexible is it? How does it work? We used his son's Legos to demonstrate the cracking and distillation aspects. This was a very interesting conversation. Please welcome Joris Vandershot. Joris. Grzzi. What do they say in your part of Switzerland? Yeah, so I'm actually just across the border. I'm in Jurassic Park, can you believe it? Jurassic Park?

And they say, Bonjour in this place here. What's Jurassic Park? Well, the Jurassic was named after a mountain range where they found these fossils. And that happens to be the Jura Mountains, which are if I look out of the window this way and they face the Alps which is if I look out of the window that way

okay I didn't know that I'm sorry I missed you last week but it was a hectic trip through Geneva all I saw was was the airport so maybe next time so you are the first guest on this show who is an

expert in oil refining and hydrocarbon refinings. You had a career at Royal Dutch Shell. Now you're working at an electricity, renewable, grid balancing outfit, and we can talk about that later. But let's take a deep dive because I want to really understand personally and for my viewers the refining process and how central it is to our modern world. But let's first take a step back. You mentioned Jurassic. What is your, how did you become interested in energy? And I know some of your writings you talk about humans as pyromaniacs and the importance

of fire in our evolutionary trajectory. Why don't you give us a kind of an opening overview? Yeah, sure. Nate. So I'm maybe just for the background, I'm an engineer. I'm just a very simple engineer and I like to understand the world

in simple engineering terms. I specialized in something that you'd recognize as system dynamics, probably stocks, flows, feedback loops which is of course a science that underpinned limits to growth, the report to the Club of

Rome. And the flow that I've always been interested in professionally is this Niagara of oil that feeds our global metabolism. Because indeed, man, unique among living species on Earth, is the only one who has managed to create a metabolism outside of his own body. There are the calories that we eat like any other animal, but there are also a lot of calories that we burn outside of our own bodies. And this started with a simple campfire where we cooked food, really, which is partly reason why we're in a kitchen here. But it kind of turned into something that has really been powering modern civilization. And these little campfires today have really grown in scale to what I refer to as a Niagara of oil. And maybe it's helpful for people who know

Niagara Falls to kind of picture yourself standing there. I was there as a kid. I lived in Woodstock for a year and we drove up to Niagara Falls. Yeah, like people with crazy ideas. I get it. And we drove up there. And when you stand next to Niagara Falls, I don't know if you can imagine it, but you see this enormous mass of water flowing across the edge second after second after second. And I'm talking about the American Falls, not the horseshoe ones. And you could actually feel it in your gut and you hear the thunder of this thing. Now, maybe I was little, but I think it's still like that. and when I looked for an image to convey the scale of our world energy system, I thought,

you know, if you can imagine Niagara Falls flowing not with water, but with oil, then you have a very good sense of the size of the world energy system. That is the size of our global metabolism these days. 24-7. 24-7, yes. If you're in Europe, Rhine Falls is something similar. I visited this summer, actually.

Now, it's not all physically oil. It's oil equivalent. It means if you add up all the energy we use in the world, like they do at the International Energy Agency in Paris, and convert that to oil equivalent, then you find a flow rate that's very close to the flow rate of Niagara Falls. 90% of that is stuff we burn, right? Mainly coal, oil, gas, a bit of biomass.

5% is nuclear. 2.5% is hydro, mainly large-scale hydro. And about 2.5% is all other renewables combined. So how much is coal, oil, and natural gas? I'd say about 80%. And there's actually a small 10% of biomass. like just firewood and other biomass. So where do we burn this generally, globally?

That's the interesting part. Actually, this IEA website is very helpful for that, although it's down temporarily. They break down this energy flow in a Sankey diagram. It must be the name of the inventor of that type of diagram, where you have the sources of primary energy on one side, and the end use on the other side, the end use will be transportation and industry, other and non-energy use.

I think that's the way they kind of cut it. And then you have these flows that connect, you know, oil goes into this use and gas goes into that use. And the width of each of these lines is proportional to the importance of that flow in the world energy system. And what you see is that the vast majority is indeed these hydrocarbons. And there's a very thin line which is renewables today.

And of course, that's the part that's growing that we need to grow. But in between these two end use and source, there are like two little boxes of transformation. And those are actually quite interesting. and we don't think about them very often. There's about one-third of this energy goes straight to the end user, generally fixed sites. So let's say natural gas into a home in Holland, where we heat our homes with natural gas.

There's one-third that goes through power stations, all the world's power stations. Typically, coal, few people have a direct use for coal. It's mainly used in power stations to generate electricity and then of course you have some losses but there's one third that passes through refineries oil refineries and i think we don't talk about those too often they're not very sexy but they are actually quite important for the world energy system because these oil refineries function in a similar way that mitochondria would work in the the

cells of your body and every life form. So these oil refineries are like the mitochondria of the, I think you call it the amoeba or the superorganism that is our global society. In the sense that they provide the energy molecules to society, mitochondria provide the ATP. It's a special molecule that is like the energy currency of life. And these refineries, they provide liquid fuels. So it's not a single molecule.

It's a collection of molecules. But it has the same kind of function. So between extracting the hydrocarbons out of the ground and them becoming the ATP for our global society in the form of diesel and gasoline, they need to be transformed. Oil is not gasoline. Can we use oil directly out of the ground for anything? Is some percentage of it used just straight as is or not?

No, I think maybe in ancient history, people may have used oil that just was seeping out of the ground just to light some fires or something. I've heard, but it's a tiny amount that there may be the odd power station in the world where people burn oil directly. But really, there's a lot of value add in separating out the oil into different products. And then each product goes into a particular end use. So I'm quite likely to ask you some naive questions in the next 30 minutes. If you pulled some oil out of the ground and spilled it on the floor and struck a match to it,

would it light on fire the same way that gasoline would? look I've never tried but it would like yeah yeah definitely but oil is a very how should I say is a very diverse term almost like coffee you know if you have a coffee in one place or in another place or in one country another country it's yeah it's the same name but it's it's not like a McDonald's hamburger that is there's rigorously the same everywhere you go on the planet except in Hong Kong the ketchup is green on Big Macs. Oh, really? Yeah.

But go on. I digress. And the French have their own version as well. Okay. So oil is different and why is that important? Well, look, it's got to do with the way actually, it's just the way nature is, right? So it has to do with the way that these oil fields have come into existence. And I'm not an expert in geology.

But basically, of course, oil is fossil sunlight, right? And under the influence of pressure and temperature in the earth's crust, these old plants or dead dinosaurs or whatever they are transformed slowly. They're kind of decay into oil. And that's the reason that we talk about hydrocarbons. The thing about carbon is these things are based on carbon because life is carbon-based, right? And our economy is carbon-based. Our economy is carbon-based, yeah.

And so that is the reason that these different oil fields are just at different levels of maturity, so to speak. And I think, I'm not 100% sure, but I think actually the latest stage of this is natural gas. That's like the furthest form of decay. Once you're there, you can't decay anymore. But all the others are like intermediate forms. And there's actually one interesting thing in Holland that really caused a big economic boom in the 17th century for us, which we call our golden century, which is Pete. I don't know if you've heard of Pete, which is dead plants, but only a few. few thousand years decayed.

So they still look like rotten plants almost. And if you do that for a hundred million years, you get oil. So is it fair to say that of all the different grades of oil and hydrocarbons from oil shale, which is uncooked oil to peat to peat to top. sands all the way to light, sweet, crude, their mother nature has spent various times refining that and human oil refineries around the world transmute those substances into uniform products that are used in the world's machines. Is that fair to say? Yeah, that's pretty much it, yeah. So what the function is of these refineries is to say, like, these oils are very different from one side to another, but the end use is actually fairly standard, right? A car engine needs to accept the product. And so our job, you know, as refiners, is to make products that are on spec for the customer. And that means,

meet certain specific specifications. And within that spec, there's still quite a lot of variability between whether your base oil came from the Middle East or from the North Sea or something. But it's all kind of fit for purpose for the customer. And there are stringent specs that you sell against. But the interesting bit is, when you buy oil, there are no specifications. Can you imagine that? There's no specifications.

So you write a check for, well, you know, what's a big VLCC? Two million barrels. Let's say $100 a barrel. So you write a check for $200 million to some guy saying, well, look, here you've got a ship of oil. No guarantees. Wait a minute. Those, those ships, VLCC, what's that stand for? Very large crude carrier.

Crude carrier. They carry around $200 million each of. oil on one shipment? Oh, yeah. Well, they carry two million barrels. So, well, you're an economist. Two million barrels. And so when you buy that, when, when Royal Dutch Shell, where you used to work, buys that, you could get it from the Uralz or Brent or West Texas or refined tar sands or whatever you have agreed to purchase. And then it comes into the refinery and, and then experts like you have to figure out how to how to make that grade of crude oil, which is very different from around the world,

into the very specific products. Yeah, indeed. And many refineries kind of specialize in treating certain types of crude. I would assume that the refineries specialize in crude that's more available in their region. Yeah, for example. You know, it's a whole kind of economic trade-off. For example, so I worked in a rather large refinery in Rochdam. So Rotterdam is a good place for a refinery because it's one of the biggest ports in Europe.

And we had an advantage of scale, right? It was a big refinery. I think we transited about 0.1%. of global energy use went through this single refinery of two square miles or something 25 gigawatts of energy products molecules so not electrons but

molecules and yeah that's quite sizable so if you have size you can take different types of crudes for example and you can say well my base diet we call it a crude diet, by the way.

My base diet is going to be Middle East, you know, Arab light or Arab medium. We took in some Arab heavy as well. The odd Kuwait. But I'm also going to take the occasional crude from Russia, you know, at the time.

Can't do that now. But at the time, Russia was was still a trading partner. So you can buy crudes or maybe some other crude that comes from Brazil and that is a bit of an odd quality and that other refineries can't take because it doesn't fit their kit. And you can just blend it away at 5% or something. You can blend anything away just as in the kitchen. It's the same thing.

Okay. So when we first met, I don't know when that was. a year or two ago, you, in a very informative way that I hadn't seen before, you showed me some Legos that represented what happens in refinery. Did you set those up today? Yeah, yeah. I went back to my youngest room and plundered his store of Legos to talk a little bit about oil. Yeah, so why don't you break it down for the viewers, Joris, on how oil gets refined using your son's Legos?

So here we have an example of the different molecules that are in oil physically, and I've already sorted them to make things easy. So oil is basically carbon-based. And here, every Lego that you see, every little round dot is one carbon atom you have to imagine. And by default, every carbon atom will connect with four other atoms. So on each side, you have to imagine for this particular one that there's a hydrogen. But I'm not showing the hydrogen. So I'm not showing hydrocarbons. I'm just showing the carbons.

because it gets messy otherwise. Now, an oil is a mixture of different chains of carbon chains, of hydrocarbons, that can be in any shape or form. I mean, the ones I'm showing here are mainly linear, but that is not necessarily the case. So there are millions of alternatives to the ones that I'm showing here. And, well, we could say hello to a couple of them. This very simple one, you may recognize it, Nate.

It's what we call C1, so one carbon atom. It's methane, natural gas. So when you heat your home with natural gas, this is the thing that you're actually burning. With four hydrogen. So you would need tinker toys to demonstrate it correctly. Yeah, exactly, exactly. And then actually, when it's in the ground,

that natural gas actually comes generally with a couple of the longer ones. That's what we said previously, right? It's never completely pure. So it comes with the second one, C2. This is ethane. It's called ethane. And that's not very well known. So in a refinery, if we go to that, these are a nuisance.

So they're generally burnt. They're used as refinery gas, we call it, so to heat the refinery itself. Here we've got C3. We call it propane. Maybe your house is heated with propane if you live out in the countryside. It is. C4 is butane. And as soon as you get beyond four, you can see that there's two options to combine four carbon atoms.

You can do a linear chain or you can do this little Tetris form here. and that can happen for all of these. So that's where you get the complexity. And that's actually why life is carbon-based is because you can make all these complex molecules with carbon atoms. And why does that mean life is carbon-based? Because other types of atoms wouldn't have that flexibility

and Lego-like? Yeah, indeed. you take oxygen, for example, you know, life is not oxygen-based or not primarily oxygen-based because oxygen can only make linear chains, right? So you can't create DNA out of oxygen. So just here's another naive question. So a low-carbon future, based on what you're saying implies a lower scale energy future and a lower scale consumption future more than likely, right?

Just based on first principles. Well, you can find alternative sources of energy, but yeah, a low carbon future means burning less of this stuff because this all becomes CO2 when you burn it. Right. Okay, we'll talk about that later. Keep going with your example.

Yeah, sure. So here you've got a range of molecules. And maybe, let me just quickly finish this. So here in the middle, you've got things that go into MoGas, gasoline, sorry. This would be something that goes into kerosene, jet fuel. And then a bit heavier is diesel fuel, typically. Right?

I'm just shematizing. And then over here on the right, you'll see I took two big ones that have a lot of carbon atoms. They're not actually arranged like that. And I made them black because when you distill a crude oil, this is the stuff that is actually black, these very big molecules. And all of these become transparent. They are transparent.

It's just when they're mixed with these guys, the oil overall is black. So when oil comes out of the ground, it's black. But when it's refined, there's a bunch of products that are clear or transparent. And then the black color. stuff sinks to the bottom and is asphalt or or exactly yes and and and so a refinery basically has has three functions and the first one is just sorting these molecules the second one is cutting and pasting and the third one is treating the molecules so if we start with sorting molecules we basically call that distillation it's done with heat you can imagine if you have

have a pan or a distillation tower with all these molecules kind of mixed up and you heat it, then the lightest ones are going to evaporate first. And there's actually a heat profile in these columns which causes these fractions, as we call them, fractions of the barrel to separate into different cuts. and you extract them from the distillation column in different cuts. So typically, for example, these two guys, they might go together, C3, C4. They can be sold together as LPG, right? And then maybe in the next column, they're separated out into propane and butane

because we want to sell those separately, for example. But the most important cut is on the heavy end, where you separate what we call the residue from the transparent products. This stuff is generally worth less than crude, and these molecules are generally worth more than the crude oil that goes into your column. So that's the basic economics of this. So what is the yellow represent on the diesel? The yellow ones here are sulfur atoms.

So they're considered as impurities that, need to come out of your fuels for different reasons. And so the third function of the refinery cleaning the molecules is mainly about removing these yellow bits that represents sulfur. Now, they can be attached to all of these. I just had an example here in the diesel one. And it's roughly proportional. So this would be a medium sulfur crude with about, you know, five atoms of sulfur for, well, I haven't counted it, but something like 200 atoms of

carbon. And is the sulfur, is the sulfur in all oil or does some oil have a lot more sulfur? Oh, it's a very big difference. It's a main differentiator for crude and it's a main determinant of their value because not all refiners have the equipment to remove the sulfur. And what is, why do we need to remove the sulfur? Mainly two reasons. Historically, it's been about acid rain. And actually, I think that is a pretty nice example of how regulated capitalism can work, at least what I've seen in the Netherlands, is your company goes out and delivers some product, and at some point society finds that there is a problem with your product.

and then you sit around a table and say, look, this sulfur is causing acid rain. We've got to do something about it. We realize you can't do it tomorrow, but let's start a plan to reduce sulfur over time. And so that's what has happened in European refineries, and I'm sure it's the same for American refineries. No, no, I don't, I'm not expecting you to be an expert on this, but I have heard that one of the explanations for the record temperatures this summer and yesterday was announced that September was, the all time hottest September in recent times was because of the lowering of sulfur content in marine fuel due to environmental regulations has reduced the masking effect of sulfur particles and therefore in the short term boosted global warming. Do you have any thoughts on that? Oh, yeah, sure.

So, marine fuel is the black stuff, right? We hadn't quite finished our distillation, but this residue is not thrown away. It's going to specific uses, which are bitumen and marine fuel, basically, big ships. They have engines that can handle this black stuff. And as you can see... What is bitumen? Oh, sorry, asphalt. The stuff you make roads with.

Right. But isn't tar sands also called bitumen? And does tar sands not need to be refined as much and can be used as asphalt? So I'm not an expert on tar sands, but by the name and by its reputation, it's extremely heavy crude. And it's mixed with sand, right? So you're going to have to separate out particles of sand. I don't know how they do that. But the other thing is it's got a huge proportion of this black stuff

and not much of this white stuff, right? So maybe only this much or something. Right. So what you then have to do with tar sands, and that brings me to an intermediate function of a, refinery, we said the refinery needs to sort these molecules. It needs to treat the sulfur, but it also reforms molecules. It cuts and pastes molecules. And this guy, in particular, it goes with a residue. It's called vacuum gas oil. It's distilled out in a separate column.

And then it can go into what we call a cracker. In America, you have cat crackers, there are, which means catalytic crackers, hydrocrackers are more in Europe or you have thermal crackers. All of those, what they do is they just cut these large molecules into smaller ones so that this guy can now go into diesel and maybe this guy can now go into gasoline. So how do they cut them mechanically? How does that actually happen? So the brute force is temperature. You heat it up enough and at some point they will crack. They will just break.

And then there are smarter forms if you use certain catalysts, that's cat crackers. Another form to do it is you do the same thing in a hydrogen environment, catalyst and a hydrogen environment, and then you get a hydrocracker. and one will crack it more into diesel components. Another, the catcracker will make more gasoline components, for example. Now, the tar sands that you were talking about are a lot of this very heavy stuff. So they will need a lot of cracking, upgrading, they'll probably call it. To come back to the sulfur, though, the marine fuel you are asking about,

it used to have a specification and I must say I might be slightly outdated but there were two specifications on the ocean because we get the sulfur out for acid rain

but out on the open ocean sulfur is less of an issue right because there's no forests Yeah, but those clouds eventually make their way to land somewhere. Yeah, so look, I'm not the right person to have the exact rules on that. But unlike CO2, because people mix up CO2 and sulfur very often and get it completely mixed up.

So unlike CO2, sulfur is more of a regional problem, right? So if you have a ship out sailing in Antarctica, the sulfur it emits is not going to be a problem in forests. Okay. So for a long time, these fuels have admitted quite a high percentage of sulfur. I think it was four and a half percent or something. And then the regional seas like the North Sea, so around the continents, started implementing low sulfur bunkers or enforcing low sulfur bunkers. because they found that the ships that were sailing close to the shorelines did actually impact acid rain. And there's a couple of other environmental issues with sulfur as well.

So they started regulating this to 1.5%. But now the global specification has been lowered. I don't know to what level. but I'm pretty sure that that is the reason why there is now less sulfur emitted. And these sulfur emissions, they cause particles up in the atmosphere that partly reflect sunlight, which is why they depress temperatures. You know, there are these geoengineering schemes where people want to inject particles into the atmosphere to reflect sunlight, so we're all less warm.

Sulfur does some of that by itself. So if you remove the sulfur from your fuels, I can imagine that you have a temporary impact on that, yes. Great. Let's reduce the temperature and kill all the trees. I'm partially kidding. Okay, so let's get back to the big picture here, Joris. I'm sure you've watched my frankly series on just stop oil on refining.

And I made just a not a detailed, but just a general observation that if for some reason we didn't need gasoline, because we had all electric cars, for example, I argued that at least in the near term, it would not significantly change the demand for oil or the need to extract the same amount. amount of oil like 30 billion barrels a year that we're extracting because of what you just illustrated that gasoline is but one of those white series of carbon atoms that we get from a barrel of oil. And if we still had the demand in the global economy for all the other things, we would roughly need the same amount of oil. What are your thoughts on that? Yeah, so look, I think on the on the on the short term, you're right that these refiners, they have what, what we call the butcher's problem, right? A butcher cannot only sell T-bone steaks. He has to buy an entire cow and he's got to sell every part of that cow.

So if there's a reduced demand for one of the elements, he still has to sell these other elements. But I think what happens in the oil industry historically is that if you give it enough time, well, on the very short term, like today or tomorrow, there is flexibility in these refineries to some extent. So, for example, there are molecules, let's say the C10, the one that's 10 long,

it might go into gasoline and your car works fine with it if it's a part of it. But you can also cut it into the jet fraction. So these are distributions, right? These cuts of the barrels are distributions. And so you can play a little bit with those distributions. I read a Conoco PowerPoint a couple weeks ago that said that there's like three or four percent flexibility currently like that, but it's not 30 or 40 percent. No, you're right.

This is on the margin. And then with a little bit more time, so, sorry, there's a possibility also for different uses, of course. So in Europe, for example, we send molecules to the chemical industry that in the US might go into gasoline. So you can just route things to different uses. But of course, you have to have the use for it. But on the medium term,

I think if you reduce the gasoline demand fairly intensely, refineries will start adapting and will use their flexibility. And on the kind of 10-year term, they will be able to invest in units that just make different, products that are more suited to your new situation. So over time, the refineries can adapt. But we would still need diesel and bitumen for roads and naphtha for plastic precursors and all those other products unless those demand for those products goes away as well.

Oh yeah, sure. But in the end, it's a mass balance thing, right? if you have less demand, even if it's just on one of your products, in the end, you're going to need less crude oil. I don't know the situation in Europe, but in the United States, they're not building any new refineries. And I know that the majority of our crude is shale oil, light oil, and we have to pair it with our existing refineries with heavier oil from somewhere else to get the portfolio of atoms or of

molecules that you just described. Is that a risk to the global refining industry as the world has more geopolitical instability and different existing built infrastructure refineries require a certain caliber of oil or how much can we MacGyver the existing refineries to adapt to, you know, a narrower portfolio of inputs to their refinery? I think we have quite some flexibility, but overall, I'd expect there, at least in Europe, we've seen refinery closures. So the smaller ones and the simpler refineries that have less upgrading capacity will close first because they're the ones that make the least money. And the larger ones are able to mix, as you just described,

maybe a very heavy crude and pair it with a very light one. And you just make a 50-50 mix so that you have your distillation column kind of nicely balanced and all your subsequent units. So you can do quite a lot, I think. if you're talking about more and more high sulfur crudes, for example, it needs investment in desulfurization capacity. So you may see an ongoing need for investment in these assets so that they can treat, you know, the increasingly difficult crude oil, because I think the stuff we're getting out of the ground,

especially in the states, you know, becomes more and more complex. And this is why for tar sands, for example, the overall CO2 impact is also a bit higher than for regular crude because it's so much more difficult to refine and upgrade. So what about and just feel free to tell me if this is a question you don't have expertise in. But there is the chemistry of scaling and overbuilding solar, wind, and other renewable technologies combined with hydrolysis to create zero carbon or low carbon fossil fuels. Like we can create some of these chemical chains with technology at a higher cost. what can we do and what can't we do and what are the trade-offs in that? Yeah, so I'm not the best expert to ask, but on a kind of conceptual level,

you know, there is carbon around and you can shape that and create your own molecules, but it's going to take you a lot of energy and equipment to do that, right? So I've seen some schemes to pull carbon out of the air, for example. That doesn't sound very efficient to me. I mean, it seems crazy, to be honest, to me, to build machines to get carbon, to get the CO2 out of the atmosphere, given the concentration levels in the atmosphere, right? You're going to burn a lot more carbon with the energy that you use in order

to do that. I've not seen one of those schemes that that works. And unfortunately, some of the IPCC scenarios are fully built in developed global technology that pulls carbon out of the air that way. Yeah. To me, you know, if you're talking, reducing carbon levels like that, the only thing that makes sense to me, but it's more of an intuition than that I've done in sums is to use nature right nature a tree pulls carbon from the air so plant trees or maybe some of the more let's say novel things that might be to stimulate algae growth in the oceans or something like that but i'm sure that has its downsides as well but but you know nature can do things for us like that.

I think there's some people looking at enhanced rock weathering, but building machines to pull out carbon doesn't sound very promising to me. So what does sound promising to you in your history at an oil refinery? And what do you think about our future on energy depletion? climate change technology what are you thinking right well I kind of think in

in scenarios right and I think there's there's one scenario which is by far the most likely one is that we're going to transition away from using this

solar capital that we have in the ground to using solar income in the form of photovoltaics, wind farms, and the likes.

I don't think that will be overnight at all. So I'm not very optimistic about the speed at which we can actually transition because

the investment you need, to do is or the results are linear with the investment that you have to do right um sometimes people say oh yeah it's all going to be exponential uh and and they cite the the equivalence of uh of the microchip revolution but i think the big difference uh with with that type of exponential uh growth in the microchips was actually that it was uh an exponential shrinkage right they just managed to to edge more and more circuits into a fixed amount of material. Whereas if you want to grow solar PV exponentially,

it means you just have to cover more and more square meters or square feet or whatever you want to do, you call it. And I think that is going to take a lot of time and time we may not have. But even that isn't an energy transition. It's an energy addition to the global superorganism, which is totally dependent on hydrocarbons. It's more like building a protuberance on the body of the superorganism that might end up as a fin or a wing or something, but it's not replacing the whole body. For the moment, we aren't. You're right.

For the moment, it's only additive. So we're maybe avoiding, you know, we've avoided further growth, but for the moment, fossil fuels are still growing. And so that's a real issue. And the underlying issue is, of course, that we're, you know, from a kind of energy concentration perspective, we're going back to being hunter-gatherers, right? We're chasing the wind and the photons that you have to catch with these giant nets we call PV panels or these blades we call wind turbines. Well, I think you said it aptly earlier is we're trying to shift from using solar capital, our stored sunlight bank account to living on solar interest, which is the daily. weekly, monthly flows of the sun and the wind plus technology.

So usually when people start living on interest instead of drawing down capital, they have to consume less. So I don't see a way that we can have a 19 or 20 terawatt society with renewables, not even close. But I do think in tandem with declining oil and gas and hopefully not much coal, with solar, like you point out, there is some intermediate landing point for society. Have you done the numbers on that,

or do you have any opinions on the size or how that might look like? No, I haven't done the numbers, but I've seen different scenarios of, I don't think there are many scenarios that see this 20 terawatt going up. But there is a lot of room. Other than the IMF,

and the World Bank and the United Nations and most of the international authorities. Yeah, well, we'll see about that. But I think there's a lot of room in efficiency, though, because the 20 terawatt is primary energy, and you don't have to replace about, I don't know, 40% of that is just waste heat. And so you don't have to replace the waste heat, of course, when you install your solar panels and your wind farms.

So what ends up happening is if we stabilize and somehow are able to keep the financial system intact is turning a larger percentage of our machines to motors that are more efficient, it's kind of a reverse Jevin's paradox that on the flat to downslope, that efficiency will soften the blow if more of our machines are electric as opposed to wasting most of the energy just to move a 3,000 pound vehicle powered by gasoline or diesel. Well, yeah, it should be a combination of a lot of things, right? So the switch to electric for vehicles is part of the answer.

So I'm Dutch, so I think we should cycle more. I'm Dutch too, and I cycle every day. And so are you. Oh, good. So, you know, a lot of our movements, our luxury movements, let's face it, you know, I see it everywhere we, you know, we drive our kids to school. That's just crazy when you think about it. So I think there's a case for more simplification and also, you know, smarter use of, of heating heat is a big part of the equation.

And I think, you know, for a house, through smart design, you can really bring down the amount of calories that you need to keep a comfortable temperature in your house. So to totally put you on the spot, Joris, if you were. advising the EU on energy policy, given what you know with your refinery background, and obviously you follow this podcast and are fluent in these systemic issues. What are some of the things that you think the EU and the world are doing now in the energy space that are likely dead ends? And what are some things that should be expanded and looked into? And what are some other possibilities that should be researched even if they're not on the radar right now. Look, I don't have a strong opinion on what the EU is or isn't doing at the moment.

I think there's a lot of professionals in the fields that see the future. And sometimes, you know, there may be a bit of hype around this or that. But I think we should try a lot of things and also see what works, right? You don't always know from the start which technology, for example, is going to work. I think it's well possible that there may be a lot of advances, for example, in energy storage technology still, right, where you might say, well, yeah, you know, the lithium and the this and the that. Actually, contrary to the PV panels, where I see this linear relationship between, you know, if you want more power, you have to install more square meters. I'm not sure we've hit the bottom yet with energy storage technologies and maybe we will find novel chemistries

that are much less of an issue in terms of resources and that could really give us a performance boost. So I'm pretty sure that there's a lot of upside in that. Well, there are things that are more simple chemistries like sodium batteries that aren't as good as lithium batteries but are still pretty good and salt is eminently more available than lithium. Yeah, for example. And I think there's a multitude of examples.

I hear in the States there's this startup storing energy with rust, right? Just iron rust. And yeah, it's not as compact as other batteries. It maybe takes up 10 times more volume. But if it's based on iron and it's for a grid scale battery, maybe that's a good solution. So I think there's a lot of room for innovation on that particular front still. Nor do I think that batteries are the only solution to energy storage, by the way, especially in my current role. Because we also see a lot of room in terms of managing flexible energy demand with the

and customers, right? I think historically, industries have always kind of flocked around places where in space and in time, energy was concentrated and thus fairly cheap. And maybe we've had this period where we could freely ship energy and have it on demand all the time. But it may not be all that bad to go back to the old days. So where I live in the Alps, there used to be a lot of aluminum smelters, right? And you think, well, why in the Alps? It's because there was hydroelectricity, right?

So they just installed the industry where the energy was. And it was the same thing in 17th century Netherlands, where we had this peat, which virtually nobody had at least not available at water level, so it's easily transported by boat. And this gave a significant energy advantage to the Netherlands and so to the Dutch economy. I think half of the world's sugar refineries were in Holland at the time, just because energy was cheap there. And that's the reason why Iceland is attracting certain energy heavy industries. And maybe we'll go back to something like that where we concentrate industries not only where the energy is, but also when the energy is, i.e., you know, when the sun is shining.

or when the wind is blowing. Well, that would mean that Switzerland and surrounding areas could be one of the richest areas in a post-fossil fuel era, a century from now or whatever, because you have that height differential and can store water and release it whenever you want. Yeah. Natural batteries.

But look, I was looking at the electricity prices in Norway last week. And they've virtually been at zero. And Finland, by the way, they've virtually been zero because apparently it's rained a lot and all the dams are very, very full and they just have to produce.

So indeed, yeah, specific areas will have definite benefits. I think Canada has a lot of hydro as well, so it could be developed. I want to ask you a few personal questions. And you listen to my podcast so you know what I'm going to ask you. What advice do you have being a macro observer, being non-energy blind? Do you have any personal advice to listeners at this kind of moment of human predicament and global polycrisis?

Yeah. Read your book. Reality blind? Yeah, look, I think nobody knows about your book, to be honest, that your podcasts are fairly well known. But it was a real discovery for me. And it was an amazing thing because apart from being pretty new for me, and I learned some things that I just never thought about. But it's also hilarious. And so my kids would see me, out on the count literally because of the way you, you structured with your co-author. Yeah, my co-author. Most of the funny parts were DJs, but.

Oh, well, like you guys have done a fantastic job. So I'd recommend anybody who's remotely interested. And if you want to have a good time, that's a good book. Thank you. Anything else? No, that's it for me. And what about young humans? what what recommendations do you have for teenagers and 20 somethings who are coming of age at this this moment of the carbon pulse

yeah well you can probably note i'm not much into saying people how to behave but i'm again going to recommend reading 80,000 hours dot org and it's a wonderful web sites that sets itself a goal to find out you've got 80,000 hours in your career, how can you do the most good in the world? And I think that's a fantastic question to ask. And these kids, there's some young people from, I think it started at Oxford University, have just kind of fleshed it out and said, well, what's the way to think about it, about your career choices and what you want to do and how you want to contribute to society. And of course, there's a lot of thinking. about contributing to, you know, environmental causes, et cetera.

So I'd recommend anybody to check that out. I have not heard of that or seen it. I think it's a great idea. I think education is first and foremost, and I think asking questions rather than having answers is the way to go. I will check that out and we'll put it in the show notes. Joris, what do you care most about in the world? Yeah, that's a, how many answers can I give?

As many as you want. I think we humans, we care about things we spend time on, and we probably spend time on things we care about. It's like a feedback loop. There you go. So obviously, your family and friends, but kind of at a macro level, I think I feel a very close connection with nature, you know, as in just life other than humans. I mean, I like humans as well, but I think we're underappreciating the rest of the biosphere.

And yeah, you know, I care about maintaining a livable planet and about, you know, conserving. nature, I suppose. So I know that you are working on some very interesting things. I'll give you a chance to maybe give a teaser of that. But if you were to come back on the podcast, what is something relevant to our futures that you're passionate about that we could take a deep dive on? Helio mimicry. emulating the sun. So when you say heliomimicry, are you talking directly about nuclear fusion, or are you thinking other things?

Yeah, so that's the reason I coined this new term, is I think it's wider than the types of fusion that people generally consider. So the most of the, work today is done on what I'd call high energy fusion. So you've got to make things really hot or very high pressure with lasers or with millions of degrees like they do in the south of France. And then there's a range of startups that tries to do the same thing, but more agile and smarter. So there are billions flowing into startups all in the high energy fusion part.

and the part that I actually am most interested in is the low energy fusion, also known as cold fusion. And this is much more uncertain, right? There may only be a percentage chance that it actually works, but it's a risk-reward thing, and that's why I find it so interesting, is if that type of fusion works, you may be able to get on a cost curve much earlier and much lower because those are compact devices that you could do fusion in. Whereas the other ones, you're just creating new nuclear power plants, so to speak, that are going to take decades and billions of dollars to develop. And so, yeah, I'm actually quite interested in really testing the edges of science to see

if there's a mechanism to diffusion at low energy. And that's not very common, but it happens to be the field that I've kind of investigated over the past decade. And you say there's a percentage chance, as in like 1% chance in that ballpark of this happening? Yeah, that's my view. And the reason for that is that there are so many results coming in.

Now, there's a problem with repeatability, reproducibility. But there's a research group at MIT who published about this. And they compare it to the transistor development in the 1930s and 40s. In the beginning, we saw effects of the transistor type that we couldn't place. We didn't understand what was actually going on. And that took decades. and it was only when we actually understood the mechanism that we could develop the transistor

and that gave the microchip industry. And I think something similar may be going on with all the cold fusion initiatives. And this is why, for example, Google put 10 million into it a couple of years back. They didn't find anything, but it was a good science. They published in nature about it.

I think there's possibility that one of these groups will break through. And of course, there's also an overwhelming possibility that they won't. But it's worth looking for. I have two general replies to that. One is most of the Titans in AI believe that AI will solve the heliomimicry challenge.

I think 100 terawydewy-wimicry challenge. I think 100 terawatt society would destroy the earth and pull in so many non-carbon aspects of our natural world that there would be nothing left unless that technology was matched with social and governance innovations as well as the technological innovation. That's my general sense on that. Look, I think you're right. it's at the same time it's something that could really help us but on the other hand we have to get a lot smarter about how not to ruin the planet further and if we get more powerful only to speed up our plundering of the planet that may not be the best outcome for for man but in the meantime if something like that can really help us speed up an energy transition so far

for that it would have to happen soon. That might be of interest. So if I have a nuclear fusion reality roundtable or something, would you like to join in on that? Do you have enough insights and ideas? Yeah, sure. Okay, we'll do it. Joris, thanks so much for your time

and for reaching out to me a couple years ago. And to be continued, Mon Amin. All right. Thanks, Nate. If you enjoyed or learned from this episode of The Great Simplification, please subscribe to us on your favorite podcast platform and visit the great simplification.com for more information on future releases.